From Nightly Business Report:
One On One With Chris Larsen, CEO, E-Loan
SUSIE GHARIB: Investors and consumers are also warming up to borrowing money on the Internet, and one of the top lenders on- line is E-Loan. It's a $20 million broker based in California that sells home mortgages, car loans and credit card deals. E-Loan was a hot IPO when the stock came public in June. But it's now trading at about the same price as its offering. Joining me live now in New York is E-Loan's founder and CEO, Chris Larsen. And welcome to NIGHTLY BUSINESS REPORT. Good to have you here.
CHRIS LARSEN, CEO, E-LOAN: Thanks for having me, Susie. I want to point out we are trading at about 60 percent above our offering price.
GHARIB: Well $21 now, $14 dollars at the offering, so slightly above that. But let's talk a little bit about rising interest rates. Because this has been slowing down E-Loan's mortgage business. How are you going to grow E-Loan in that kind of environment?
LARSEN: Well you know, we're really focusing on building out the entire, part of the consumer debt portfolio; mortgages, auto-loans, credit cards, business loans. But we did see our business grow 35 percent during a period when the industry actually slowed down about 24 percent. So, we are very pleased with those results. And we think you know such a huge market, almost $2 trillion in all of these categories, that the opportunity is just tremendous going forward.
GHARIB: Well one of the successes of E-Loan in terms of selling mortgages to consumers, there's been a lot of choices. You can shop around for your mortgage. But now with carfinance.com which you acquired and also your Internet credit card, there aren't those kind of choices. Isn't the key to giving consumers, isn't the success just giving them choices?
LARSEN: Choices is absolutely key. And in the mortgage space absolutely. We have over 70 lenders, 22 different capital market providers. In the car finance category, we bought from Bank of America (NYSE:BAC), because it was part of Bank of America, that was single source, we will now morph that into a multi-lender in the car space, which is a very key category. In the credit card category, what we're really trying to do is provide an offering that gives the consumer as much choice of what they can get. We never want to turn down a customer. So there, we think it's important to partner with one of the leaders, and that's what we did in that space.
GHARIB: And now you've been spreading this E-Loan concept overseas. You have been doing deals in France. You just came back from a deal in Paris, doing deals with Softbank in Japan. Do you think you're doing too much where you haven't yet dominated the U.S. market?
LARSEN: Well, you know the whole Internet space moves so quickly. You know we have leadership now in the U.S. We see incredible opportunity in Europe, so we did partner there in both our European operation with Avende, a French company and with Rupert Murdoch and Softbank in the UK.
GHARIB: It's not a distraction?
LARSEN: Well, we think it's important. We have to have a global brand, it will really spread cost. And most importantly, long term, we think there's a opportunity to bring foreign capital back to the U.S. consumer. We think that strengthens the entire brand and the entire business.
GHARIB: How are you going to finance all this growth? I mean, you look at your finances. You pre-announced your earnings saying that you're going to have a loss bigger than Wall Street was expecting. Revenues are a little bit slower than everybody was expecting, and your stock is you know not doing as well as it was the time of its offering. How are you going to finance all this?
LARSEN: Well, overseas for example, all of those financings came from partners. So, we didn't have to put any cash in the overseas venture. We raised about $60 million there. And here in the U.S., we raised about $50 million on our IPO, we're in good shape there. We'll look at the capital markets opportunistically going forward. But again, we really have to focus on building the company globally in these additional products representing the entire right side of the balance sheet.
GHARIB: Well, we appreciate you coming by and telling us all about it.
LARSEN: Thanks, Susie.
GHARIB: Thank you very much.
GHARIB: And we've been speaking with Chris Larsen, CEO of E-Loan.
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